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Asian markets brush off Trump threat of Mexico shutdown

Representative image. (Image Source: PxHere) Photograph: (Others)

AFP Hong Kong Aug 24, 2017, 06.06 AM (IST)

Most Asian markets on Thursday brushed off a Wall Street retreat, with analysts saying a threatened government shut-down by Donald Trump was unlikely, while focus turns to a key central bankers' meeting.

In a firebrand speech to supporters the embattled US president warned he would bring an end to Federal business in a bid to push through his controversial Mexican border wall, while also threatening to tear up a trade agreement with Canada and Mexico.

The outburst fuelled concerns that the nascent administration is struggling to find consensus on Capitol Hill, even with his own Republican party, raising questions about his ability to push through promised tax cuts, deregulation and infrastructure spending. 

It also led to a warning from Fitch that it would review its US sovereign rating if the government was shut down.

All three main indexes in New York ended in the red.

However, House Speaker Paul Ryan said there would not be any closure of government, while analysts also pointed out that such a crisis was unlikely and Trump was probably bluffing.

"It's Congress which will decide on the debt ceiling limit and avoid the shutdown -- not the president,” said AxiTrader chief market strategist Greg McKenna.

He was also confident Trump's economic agenda could be pushed through, adding: "It's likely the Congress will need to work out what it wants to do on tax cuts. I'm still expecting some progress there in the months ahead."

Asian markets mostly started in positive territory. Hong Kong rose 0.5 per cent, a third-successive gain as traders returned to work after a typhoon hit the city Wednesday.

Sydney rose 0.2 per cent, Singapore was 0.3 per cent higher and Seoul put on 0.5 per cent, while there were also gains in Taipei and Manila.

However, Tokyo eased 0.1 per cent by the break on the back of a stronger yen, while Shanghai dipped 0.2 per cent.

Attention is now on the Jackson Hole symposium in Wyoming, where the world's top bankers are gathering, with US Federal Reserve boss Janet Yellen and European Central Bank chief Mario Draghi on the list of priorities to watch.

With the US and eurozone economies both picking up, dealers are hoping for some pointers about the future of monetary policy.

The euro has rallied in recent weeks, hitting a near eight-year low against sterling, with the ECB expected at some point to start winding in its massive stimulus, while another round of upbeat economic data Wednesday ramped up those expectations.

 Key figures around 0240 GMT 

Tokyo - Nikkei 225: DOWN 0.1 per cent at 19,408.80 (break)

Hong Kong - Hang Seng: UP 0.5 per cent at 27,530.65

Shanghai - Composite: DOWN 0.2 per cent at 3,281.70

Euro/dollar: DOWN at $1.1806 from $1.1813 at 2030 GMT

Pound/euro: DOWN at 1.0835 euros from 1.0869 euros

Pound/dollar: DOWN at $1.2788 from $1.2801

Dollar/yen: UP at 109.20 yen from 108.98 yen

Oil - West Texas Intermediate: DOWN eight cents at $48.33 per barrel

Oil - Brent North Sea: DOWN eight cents at $52.49

New York - Dow: DOWN 0.4 per cent at 21,812.09 (close)

London - FTSE 100: FLAT at 7,382.65 (close)

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